A 2009 “READER'S DIGEST DESCRIPTION OF HOW TO BUY A CONDO OR NOT”
Charles Hanes
December 2, 2008

Many readers continue to write in and ask me for the “Reader’s Digest” version on “How To Buy A Toronto Condo”. The quick and easy answer is to find a knowledgeable “hands-on” professional Realtor that has actual Toronto condominium industry experience!

Please note that I did not say find someone with a real estate license as not all Realtors or people possessing a valid real estate license have a valid background in condos but rather I emphasize “knowledgeable ‘hands-on’ professional Realtor”.

The answer to that question is as simple as that. If you are not in the business and actually in the field every day you cannot say that you are “hands on”. The condo industry morphs itself every quarter with presale condos being built, new condos being launched and existing condos being either well managed by an effective condo board or not and being upgraded out of the “reserve fund”.

Condos are a very simple while very complex commodity. They are a home and a way of life to many while to others are strictly investments. Many investors buy into “flip”, (sell immediately upon “registration”), while others buy in as long term holds and become landlords. Each of these categories of buyers makes it’s mark on the outcome of this alleged effort to introduce a new vertical residential community to the city.

You have read enough selling rhetoric in all those advertising ad rags and newspapers! I didn’t design and develop this web site to sell condos for developers and they don’t pay me to write about them. I don’t clutter up your visit to my web site with pop up ads that interfere with your enjoyment of your time spent with us. This is simply the ONLY unbiased resource center for a truthful and factual assessment on condos in Toronto.

This is no small job! I give you this meaningful, behind the scenes information on one of the biggest dollar investment that most people ever make in their lives!

To be quite honest, most condos in Toronto are not great! Many developers are entrepreneurs with money but do not have a lot of experience in building buildings. Over my, almost, three decades of Toronto condos experience, I’m one of the early pioneers of not only the condo industry but also the digital world of condo marketing. Having produced my first interactive CD-ROM profiling Toronto condos way back in 1992 – before the Internet and/or Windows ever came along, I have seen and/or been involved with just about them all!

It’s actually amazing to me the low standard of quality that the majority of developers get away with. They get away with these low standards because the buying public let them. Oh, buyers could form buying clubs and stand together to get “value for their money” but they don’t! So what is there that would lead these bottom line management guys (I’ve seen them fight over fixing/replacing inferior finishes). So, Toronto condo buyers have really got only themselves to thank for the artificial outcome of the condo market.

What’s artificial you ask? Well, when 18 Yorkville was being pre-sold, just three years or so ago, Great Gulf shocked the market with a $400+ per square foot starting price! Great Gulf was also selling the Hudson in the Entertainment District at $315 per square foot for the exact same finishes and appointments as their Yorkville site.

My sales record shows 38 deals at The Hudson and only a handful at 18 Yorkville specifically because of the price point. Great Gulf is a very sound and reputable developer (they don’t pay me to say nice things about them, they just are good). They won’t bend over backwards for buyers but they give you what you bought and that decided more than you get from the greater majority of developers in Toronto.

Since then, Yorkville has seen the new Four Seasons with suites at $1,400 per square foot, Regency at over $1,000 per square foot, 100 Yorkville at just over $1,000 per square foot, and Museum House (one of my favourites) at around $1,200. So, the logical question is, what changed the market by some 300 – 400 percent ! ? !

These astronomical pricing structures opened the door for tons of middle market condo developers to jump in and capitalize on the high end going prices to come in with middle market stuff at $600 - $800 per square foot. It is here that the dogs are plentiful in Toronto!

Oh, the units are sold like they are truly “mansions in the sky” but what you get is “decidedly other”! I have worked with most of the developers in Toronto and can tell you from first hand experience most are working full time to give buyers “the minimal standard in finishes”.

Oh, they promise you an “Executive Concierge” but you’ll get a “minimum wage security guard”. Not that there is anything wrong with minimum wage security guards, they are just not professionally trained concierges that were promised when the sales were being made. In general, the Toronto condo industry constitutes a great “bait and switch game” and in many instances it’s being played by some of the absolute best in the game.

Our job is NOT to “SELL” you anything here at simplycondos.com! I give you the knowledge that you need to try to be on a level playing field with some of the best sales pros in the business, (who are legally obligated to sell you the condo – “seller’s agency”). Our job is protect you, the buyer! We assume the same legal obligations as the seller’s agent which are to protect ONLY the best interests of our client. The big difference is that my services are FREE to you.

With all due respect to my fellow Realtors, it is ONLY my “knowledge” that makes me so different than most other Realtors in Toronto’s 22,000+ board of Realtors. Not real estate knowledge but condo knowledge. Toronto Realtors are all licensed and undergo initial educational requirements to get a license and ongoing education in order to keep up with the ongoing changes in the industry.

But in reality, a real estate license is not sufficient to educate you on the inner workings of the condo industry as that knowledge has to be and can only be acquired first hand! To know if a building was built with good construction quality and finishes is not something that licensing can teach. To know what developers are good and which ones should be stayed away from can only be learned by someone who has spent a great deal of time in the trenches in the local condo industry.

I spent the majority of my career, (25 years +), without a real estate license working with developers to market and sell condos here in Toronto and all over the world. It was only a few years back that developers started working with Realtors at all! When I worked the sales floor we didn’t “co-operate with Realtors”. Today, one of the biggest buyer pools for Toronto condos are Realtors, speculating on condos. Judging by recent turn-outs at pre-launch “Priority Realtor Sales Events” that I’ve attended, someone should tune some of these “investor/speculators” into the reality that prices of $600 per square foot for eight foot stippled ceiling units in a softening rental market “simply does not cost justify”! Oh, well, they’re their own client but even with a 4% price reduction and possibly a couple free upgrades this type of investment has got to be seen as “higher risk”!

Has anybody looked around to see the condos that are presently being built! Here’s an off the top of my head overview of what’s gone on over the past 18 months or so in Toronto.

Charles Hanes